Discussion began around Clause 1, which covers the up-rating of certain social security benefits for tax years 2014-15 and 2015-16. Baroness Meacher (Crossbench), said: ‘I support Amendment 1, which seeks to ensure that the government have flexibility to increase benefits in 2014-15 and 2015-16 taking account of the level of inflation at the time. The amendment does not seek to impose a particular percentage increase in benefits in any year. It simply seeks to avoid the straitjacket imposed by the bill as it stands.’

Lord McKenzie of Luton (Labour) followed, saying: ‘This bill is unnecessary because if this government misguidedly wish to plough on with this capping on uprating, they could simply use the annual uprating process. The bill provides no certainty for taxpayers because there is no certainty on claimant numbers, except perhaps the prospect of them increasing, given the government's economic failure.’

The amendment was later withdrawn after Lord Newby (Liberal Democrat), responded on behalf of the government, saying: ‘... the amendments undermine the purpose of the bill and, frankly, demonstrate a fundamental difference of opinion between the two sides of the House on how we deal with the current economic situation. The government believe that the main priority is to get spending under control, reduce the deficit and restore growth. The bill helps us to achieve that. At the same time, we are implementing policies that make a real difference to people's lives.’

Discussion moved on to Amendment 7, which proposed to include a review of housing benefit in the bill, Baroness Hollis of Heigham (Labour), said: ‘Burdened with student debt and unable to build a deposit for owner-occupation while – and because – they are paying very high rents in the private rented sector, people in their 20s are now living in that sector not for five years but for 15. It is no longer tenure of transit but a permanent tenure of long stay.’

She continued: ‘The result... is an increase in the number of people needing housing benefit as rents soar and an increase in the number of people finding that even the housing benefit that they receive will not cover the ever smaller proportion of properties that they can access to rent. Rents will be too high, housing benefit too low and landlords too reluctant. What is the result? Either tenants will seek to make up the difference out of their benefit income, thus increasing severe child poverty, or they will not. If they do not, they may face eviction and end up homeless.’

Lord Bates (Conservative), replied: ‘This is an interesting amendment to consider because we are dealing with a significant crisis. There is no doubt that housing benefit itself needs to be focused on: how it has increased from roughly £11 billion, circa 1997, to a predicted £25 billion in 2015. Clearly, no one could sit in the Treasury, not have a view on that trend and not say that it needs to be looked at carefully.’

The amendment was withdrawn after Baroness Stowell of Beeston (Conservative), responded on behalf of the government, saying: ‘...we are taking a number of measures to reduce housing benefit expenditure, including limiting increases in the local housing allowance to 1% for two years from 2014-15, as we have just discussed. This change will make a crucial contribution to the essential deficit reduction strategy but it will do more than that. As the government are a major player in the private rented market, it will also exert downward pressure on rents... Where rents are increasing rapidly, there should be no presumption that the taxpayer should pick up the bill.’

Welfare Benefits Up-rating Bill summary

The Welfare Benefits Up-rating Bill implements an announcement by the Chancellor in the 2012 Autumn Statement that increases in certain working-age welfare benefits and tax credits would be limited to one per cent, rather than increasing them in line with inflation.

Previous stages of the Welfare Benefits Up-rating Bill

What is committee stage?

Detailed line by line examination of the separate parts (clauses and schedules) of the bill takes place during committee stage, starting from the front of the bill and working to the end. Any member of the Lords can take part.

It usually starts no later than two weeks after the second reading and can last for one to eight days or more.

The day before committee stage starts, amendments (changes) are published in a marshalled list - in which all the amendments are placed in order.

During committee stage every clause of the bill has to be agreed to and votes on the amendments can take place. All proposed amendments can be discussed and there is no time limit, or guillotine, on discussion of amendments.